While keeping a close eye on spending is vital for financial security, few people enjoy doing so.  Several creative approaches for effective budgeting and money management are available.

1. The 70% Rule ­­­­is percentage-based with 70 percent of income for necessary expenses. Followed by 20 percent going into savings by using automated direct deposit. The other 10 percent is for retirement and investing for future financial security. The 70% Rule is useful for those with saving as a priority, and want a simple budgeting method.
2. The 50/30/20 Rule is a variation of the 70% Rule, with three categories. First, 50 percent of your income goes toward necessities. Then, 20 percent is for financial goals, such retirement or paying off debt. The remaining 30 percent can be spent as desired. This approach may not work for many people, but can be a good starting point for successful money management.
3. Budget by Paycheck uses a calendar to track income and expenses. Color code your paycheck, expenses, and extra money to assign a bill payment to a paycheck on a calendar. Any “extra” money should be given a “job,” such as savings, debt repayment, or fun. This approach is useful if you desire structure and like having a visual tool.
4. Envelope Budgeting is a traditional method with labeled envelopes to identify expense categories. Cash for the budgeted amount is put into each envelope. You only spend the amount in an envelope, which provides strong control of your spending. Instead of cash, you may use a card or envelope to record the amount spent for each category to stay within your limit. Several budgeting apps are also available with visual envelopes to monitor spending.
5. Gift-card Budgeting manages your money by dividing your spending into categories and loading the amount onto a phone gift card. This system is similar to traditional envelope budgeting. Determine the amounts for various spending and saving categories. Then, buy gift cards for each category, such as a food store card for groceries, which will limit your spending for each budget item. With gift cards on your phone, you will always have them with you and will know the balances. Buying gift cards at moola.com can result in special deals and bonuses.
6. You Need a Budget (YNAB) is a software system and app featuring partner budgeting, goal tracking, personal support, and secure data. YNAB emphasizes these principles: every dollar is assigned a category; large expense items are broken into manageable amounts; budget flexibility when situations change; and planning for the future, without scrambling for today. The personalized support and online YNAB community discussions, included in the cost of the software, prepare you for successful budgeting on your own.
7. Kakeibo, pronounced “kah-keh-boh” and translates as “household financial ledger,” is used in Japan to manage personal finances. This method emphasizes recording financial activities with physical writing (no apps or computer), and uses four categories: (1) needs, (2) wants, (3) culture, such as books and museum visits, and (4) unexpected, for medical expenses or car repairs. Then, you reflect on these questions: How much do I have available? How much would I like to save? How much am I spending? How can I improve? Kakeibo may not control your spending but it can make you more mindful of how you spend money.
8. Zero-based Budgeting gives every dollar a specific task for spending, saving, or investing. This method encourages you to create a revised budget each month based on changes in income or expenses, which provides financial flexibility. This system may not be useful for people with irregular incomes.
9. Value-based Budgeting involves allocating income based on importance (value) to you rather than budget categories. While some items need to be paid (housing, food), how much you spend on these items depends on how much you value them. If eating out is a priority, your food budget will be higher than for someone who eats mainly at home. This approach can help you stay within your budget since you created the spending plan based on personal preferences. Beware that saving for a goal might be a low priority but should probably receive stronger recognition.
10. Pay Yourself First Budget is simple and emphasizes your financial future. Based on the amount earned, determine how much you want to save. The remaining amount is divided among necessary expenses and other spending.  The process can be awkward when a conflict exists between income available and a desire to save a large amount. Many people combine this method with other budget systems to ensure coverage of needed living costs.

Other actions that can make budgeting fun include:

• Money Nicknames. By naming your bank accounts and budget categories with creative names can create a fun attitude and personalized connection for money management activities. Also, use a Sharpie to label your debit and credit cards with a name or a specific use, such as “Hey, bills only!” or “Treat yourself today.”
• Bae Day involves setting aside a specific time, usually on payday, to review your budget and plan your spending. Bae, which stands for “before anything else,” involves a self-appointment to take action before anything else happens to your money. You can make Bae Day fun by dressing up for this self-care occasion, going to a special location, or playing favorite music.
• Money Mate Date helps achieve accountability related to finances. Your Money Mate will keep you in line for financial activities. The relation can involve a quick call to make sure that monthly bills are paid, or an emergency text to avoid impulse buying.
• Arts and Crafts. Create, or locate online, a poster to visually view progress on savings or debt reduction. Color in the poster little by little as you save or pay down student loans. Also consider using photos to represent budget categories or financial goals for more motivating money management activities.

For additional information on creative budgeting ideas, here are some links to click on:

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Teaching Suggestions

• Have students talk to others for information about budgeting actions that have been successful.
• Have students create a video, poster, or other visual with ideas for creative budgeting activities.

Discussion Questions 

1. What are reasons people are unable or unwilling to practice successful budgeting?
2. Describe the actions a person might take for effective budgeting.